Should I sell my gold now?

Question: Natalie, how does one watch gold prices online? I have a few American Eagles and wonder whether I should sell them (now that gold is supposed to be record high) and transfer to some of the undervalued stock such as Google and Microsoft? What do you think? Where would be the best place, in your estimation, to cash out of gold? Signed – Gold Bug

Dear Gold Bug,

Diversification is the most important part of any portfolio, second only to rebalancing. You are right to think that you should take profits on any industry that is trading near its high and buy back into undervalued assets in another industry. Always make sure that you are doing this according to that carefully laid out plan of diversification, however, so that you are never over-extended in any one asset class. For instance, if you’re 50 and you already have 50% or more of your assets in stocks, then it might be more appropriate to take some gold profits and buy some Treasury bills or international bonds. Certainly, if you don’t have any large cap stocks, and Google, Microsoft, General Electric, and more are trading at multi-year lows, that should be a consideration.
However, with stocks, remember that you must keep a percent equal to your age safe — i.e. NOT in the stock market. In bear market years, such as we are experiencing currently, many professionals overweight to liquidity. Do not be in a hurry to buy anything when cash is king. Cash will afford you the option to buy even lower next year on many different assets, especially if we are close to or entering a recession.
As for the exact point that is the highest for gold prices, no one has a crystal ball. There is a big difference between all and nothing, however. If you’re happy with the price you’re receiving and feel that money can be redeployed elsewhere to mark up gains again, that’s as great as it gets. I’ve listed the annual gains of various assets directly below. Anytime you perform above the general marketplace, you are assuring that your wealth increases more robustly than your peers, and that is a great, steady, calm, easy way to increase your prosperity and abundance. Trying to “get rich quick” or wait too long for the top price is often a money-losing proposition. In volatile markets like today, many professionals take profits early and often (which is one of the main reasons we are experiencing such dramatic volatility).

Investment Portfolio
Average Annual Gains 1968-2007


Asset Annual Gains
Small Cap Stocks 12.22%
Large Cap Stocks 10.52%
Corporate Bonds 8.47%
Gold 7.97%
Real Estate 6.4%

Source: Morningstar and Realtor.org © 2008

You can probably find a site that tracks gold prices by “Googling” gold prices! Good luck!
Additionally, below are links to two interviews that Natalie did with gold specialist, CEO and Chairman Rob McEwen (U.S. Gold). Rob has been in the gold industry for two decades, and he shares his wisdom candidly in these interviews. He notes that gold prices are tied to consumer confidence in the financial markets. When people have less faith in banks, they move to gold. If the financial sector continues to experience so many problems, then the interest in gold could continue to increase, even if it seems high right now. There are a lot of if’s in that sentence, however.

Sitting on a Gold Mine. by Natalie Pace. Exclusive Q&A with Celebrated (Former) Goldcorp CEO, Rob McEwen. Vol. 3, iss. 2.
Activate link:

http://www.nataliepace.com/newsletters/members/news.php?np=yes&issue=302/302&article=04


Nuggets Of Wisdom
(320 sec.) Gold industry veteran Rob McEwan on investing and exploring.
2006-08-22 on the Forbes.com Video Network
Activate link:

http://www.forbes.com/video/?video_url=http://www.forbes.com/video/fvn/business/np_gold082206&id=np_gold082206&title=Video%3A+Nuggets+Of+Wisdom

(If you have trouble finding the Forbes.com VN interview, just go to Forbes.com, enter Natalie Pace in the search box, and you’ll see the interview listed there.)

Do you have a question for Natalie? Just email Heather@NataliePace.com.